HealthTrust: Solving Workforce Management Challenges

In this business profile, Richard Lopez, vice president of advisory services, and David Osborn, senior vice president of strategic accounts and advisory services at HealthTrust, talk about strategies for better managing the hospital and health system workforce.

What drivers are pushing organizations to optimize their workforce?

Although healthcare organizations have always strived to deliver the highest quality care, there is mounting pressure to maintain top performance amid flattening revenue and rising costs. Payments are shrinking or remaining unchanged while the costs of new technology, supplies, pharmaceuticals, and other items are all on the rise. At the same time, organizations must comply with ever-changing state and federal regulations, and these efforts have their own price tags. Taken together, these drivers are creating a perfect storm in which organizations are being pressured from a cost perspective with no relief in sight on the revenue side.

One area that is ripe for improvement is workforce management. Labor is the largest expense for hospitals and health systems, accounting for between 40 percent and 55 percent of an organization’s total operating costs. Compare this to supply chain, which is about 10 percent to 18 percent of operating expenditures, and one can quickly see the impact that optimizing the workforce could have.

Remarkably, workforce management has not received as much attention in the past 20 years as some other cost control areas. In general, organizations have focused more on managing supply, pharmacy, and medical device costs, as well as capital expenditures. Although there have been opportunities to better manage labor and productivity for a long time, this area is just starting to receive the attention it warrants.

What hurdles do organizations face when engaging in this work?

To successfully manage a healthcare organization, leaders must keep numerous plates spinning at one time. They must deliver high quality care; stay abreast of the latest technological developments; keep staff, physicians, patients, and families happy; and be dedicated financial stewards of scarce labor resources. These diverse priorities are pulling leaders in different directions, making it hard to zero in on one area and realize the level of improvements needed to make meaningful differences in the bottom line.

Unlike other major expense categories—supplies, pharmacy, and facilities, for example—most hospitals and health systems don’t have a dedicated senior leader who takes responsibility for the labor expense across the organization. Although human resources departments assume responsibility for staff sourcing, recruiting, onboarding, and training, this function is not usually involved in managing labor costs per se. That responsibility is shared by multiple senior leaders, managers, and supervisors throughout the enterprise.

Moreover, many healthcare organizations don’t use standard metrics for managing labor cost and productivity, with various departments and managers monitoring productivity in different ways, if at all. This makes it hard to get a handle on current performance, identify improvement opportunities, and make swift and meaningful changes.

The upshot is that when a large group of people is trying to manage a complex entity like the organization’s workforce, there generally is a lot of variability in the way it’s done, and progress toward goals isn’t made as quickly or effectively as anyone would like.

How does your service offering(s) address these needs?

Fundamentally, there are two ways in which HealthTrust can be of help. First, we offer a comprehensive assessment of an organization’s labor management processes, from staff scheduling to managing overall staff productivity. Our goal with this service is to delve into the organization’s work processes and current state to determine whether it is spending the appropriate amount of dollars on labor resources. We spend time meeting with organization leaders, from senior executives through middle managers, collecting a variety of workload and workforce information. This lets us understand how the organization works and what its opportunities and risk points are. We then benchmark the organization against other high-performing entities to illustrate how it compares to peers. This outward view also allows the hospital or health system to see how others are implementing leading practices that yield higher productivity at a lower cost.

Next, we provide a range of technology that facilitates effective labor management. This includes but is not limited to staff scheduling, patient volume forecasting, and daily productivity monitoring solutions. All functions are integrated such that the various systems share information. For instance, the scheduling software “talks” with the forecasting system to optimize scheduling given projected staffing requirements. These two solutions then share information with the productivity tool to analyze and provide insight regarding overall efficiency across a department, facility, and enterprise.

What are some considerations for healthcare leaders when choosing this type of service? Are there key features that people should know about?

A significant differentiator with our products is they were born out of the needs of an actual health system—HCA Healthcare—which has many acute care facilities spread across the country. As such, there is real operator experience hardwired into all our offerings. The tools were developed to meet real-world problems faced by real-world organizations, and they have had a substantial effect on the productivity, labor, and cost metrics of those organizations. Our solutions strike a balance between delivering a structured and consistent approach to managing labor productivity and acknowledging that certain departments need some degree of flexibility in how they tackle workforce management. HealthTrust Workforce tools have been tried and tested in multiple settings, and they have proved to be effective across diverse environments.

What advice would you give healthcare leaders when choosing among vendors?

In addition to looking for tools based on operator experience, it is beneficial to partner with a vendor committed to continuously enhancing its offerings. Health care is in a constant state of flux and having stagnant solutions won’t realize long-term goals. At HealthTrust Workforce, we are committed to evolving our services and solutions to keep abreast of changing times. End-user input is key in our product enhancement strategy.

With regard to assessments, an organization should be sure the people coming to review its current operations have deep experience in labor management, particularly in the areas targeted for improvement. For example, if changes are being considered in the Emergency Department, guidance should come from people who have robust knowledge of that area and can suggest options and implement initiatives. Do they understand what kinds of staff are needed and what the labor challenges are? Do they know how to address productivity while still managing the patient experience, clinical outcomes, and other big picture items? Managing labor costs in today’s hospital environment with competing priorities and multiple stakeholders is incredibly tough. When a healthcare organization seeks help from a vendor in this regard, the organization must be confident that the vendor’s people know what they’re doing.

As healthcare organizations implement use of your products and services into their day-to-day operations, what advice would you offer so they can best set themselves up for success?

As mentioned earlier, it can be extremely valuable to designate a point person to be responsible for the labor expense across the organization. Often called the chief staffing officer, this job function may fall to the organization’s COO, CFO, or Chief Nursing Officer. This individual can serve as a single point of contact and have the ultimate responsibility for managing labor in the organization.

It’s also important to have ways to measure both the results being obtained and whether the labor management tools and resources are being effectively and consistently utilized. We’ve seen health systems put in a labor management tool and not see the desired increase in performance. It likely wasn’t because the tool was flawed, but more that the solution was never fully integrated into the organization. Hospitals and health systems should establish metrics upfront that show whether changes were made and what the impact of those changes has been. Remember, the tools themselves don’t change anything. It’s their ongoing, active, and appropriate implementation and long-term, reliable use by organization leaders that moves the needle.

Are there any educational materials you can share to help healthcare providers in these efforts?

In this business profile, Richard Lopez, vice president of advisory services, and David Osborn, senior vice president of strategic accounts and advisory services at HealthTrust, talk about strategies for better managing the hospital and health system workforce.

What drivers are pushing organizations to optimize their workforce?

Although healthcare organizations have always strived to deliver the highest quality care, there is mounting pressure to maintain top performance amid flattening revenue and rising costs. Payments are shrinking or remaining unchanged while the costs of new technology, supplies, pharmaceuticals, and other items are all on the rise. At the same time, organizations must comply with ever-changing state and federal regulations, and these efforts have their own price tags. Taken together, these drivers are creating a perfect storm in which organizations are being pressured from a cost perspective with no relief in sight on the revenue side.

One area that is ripe for improvement is workforce management. Labor is the largest expense for hospitals and health systems, accounting for between 40 percent and 55 percent of an organization’s total operating costs. Compare this to supply chain, which is about 10 percent to 18 percent of operating expenditures, and one can quickly see the impact that optimizing the workforce could have.

Remarkably, workforce management has not received as much attention in the past 20 years as some other cost control areas. In general, organizations have focused more on managing supply, pharmacy, and medical device costs, as well as capital expenditures. Although there have been opportunities to better manage labor and productivity for a long time, this area is just starting to receive the attention it warrants.

What hurdles do organizations face when engaging in this work?

To successfully manage a healthcare organization, leaders must keep numerous plates spinning at one time. They must deliver high quality care; stay abreast of the latest technological developments; keep staff, physicians, patients, and families happy; and be dedicated financial stewards of scarce labor resources. These diverse priorities are pulling leaders in different directions, making it hard to zero in on one area and realize the level of improvements needed to make meaningful differences in the bottom line.

Unlike other major expense categories—supplies, pharmacy, and facilities, for example—most hospitals and health systems don’t have a dedicated senior leader who takes responsibility for the labor expense across the organization. Although human resources departments assume responsibility for staff sourcing, recruiting, onboarding, and training, this function is not usually involved in managing labor costs per se. That responsibility is shared by multiple senior leaders, managers, and supervisors throughout the enterprise.

Moreover, many healthcare organizations don’t use standard metrics for managing labor cost and productivity, with various departments and managers monitoring productivity in different ways, if at all. This makes it hard to get a handle on current performance, identify improvement opportunities, and make swift and meaningful changes.

The upshot is that when a large group of people is trying to manage a complex entity like the organization’s workforce, there generally is a lot of variability in the way it’s done, and progress toward goals isn’t made as quickly or effectively as anyone would like.

How does your service offering(s) address these needs?

Fundamentally, there are two ways in which HealthTrust can be of help. First, we offer a comprehensive assessment of an organization’s labor management processes, from staff scheduling to managing overall staff productivity. Our goal with this service is to delve into the organization’s work processes and current state to determine whether it is spending the appropriate amount of dollars on labor resources. We spend time meeting with organization leaders, from senior executives through middle managers, collecting a variety of workload and workforce information. This lets us understand how the organization works and what its opportunities and risk points are. We then benchmark the organization against other high-performing entities to illustrate how it compares to peers. This outward view also allows the hospital or health system to see how others are implementing leading practices that yield higher productivity at a lower cost.

Next, we provide a range of technology that facilitates effective labor management. This includes but is not limited to staff scheduling, patient volume forecasting, and daily productivity monitoring solutions. All functions are integrated such that the various systems share information. For instance, the scheduling software “talks” with the forecasting system to optimize scheduling given projected staffing requirements. These two solutions then share information with the productivity tool to analyze and provide insight regarding overall efficiency across a department, facility, and enterprise.

What are some considerations for healthcare leaders when choosing this type of service? Are there key features that people should know about?

A significant differentiator with our products is they were born out of the needs of an actual health system—HCA Healthcare—which has many acute care facilities spread across the country. As such, there is real operator experience hardwired into all our offerings. The tools were developed to meet real-world problems faced by real-world organizations, and they have had a substantial effect on the productivity, labor, and cost metrics of those organizations. Our solutions strike a balance between delivering a structured and consistent approach to managing labor productivity and acknowledging that certain departments need some degree of flexibility in how they tackle workforce management. HealthTrust Workforce tools have been tried and tested in multiple settings, and they have proved to be effective across diverse environments.

What advice would you give healthcare leaders when choosing among vendors?

In addition to looking for tools based on operator experience, it is beneficial to partner with a vendor committed to continuously enhancing its offerings. Health care is in a constant state of flux and having stagnant solutions won’t realize long-term goals. At HealthTrust Workforce, we are committed to evolving our services and solutions to keep abreast of changing times. End-user input is key in our product enhancement strategy.

With regard to assessments, an organization should be sure the people coming to review its current operations have deep experience in labor management, particularly in the areas targeted for improvement. For example, if changes are being considered in the Emergency Department, guidance should come from people who have robust knowledge of that area and can suggest options and implement initiatives. Do they understand what kinds of staff are needed and what the labor challenges are? Do they know how to address productivity while still managing the patient experience, clinical outcomes, and other big picture items? Managing labor costs in today’s hospital environment with competing priorities and multiple stakeholders is incredibly tough. When a healthcare organization seeks help from a vendor in this regard, the organization must be confident that the vendor’s people know what they’re doing.

As healthcare organizations implement use of your products and services into their day-to-day operations, what advice would you offer so they can best set themselves up for success?

As mentioned earlier, it can be extremely valuable to designate a point person to be responsible for the labor expense across the organization. Often called the chief staffing officer, this job function may fall to the organization’s COO, CFO, or Chief Nursing Officer. This individual can serve as a single point of contact and have the ultimate responsibility for managing labor in the organization.

It’s also important to have ways to measure both the results being obtained and whether the labor management tools and resources are being effectively and consistently utilized. We’ve seen health systems put in a labor management tool and not see the desired increase in performance. It likely wasn’t because the tool was flawed, but more that the solution was never fully integrated into the organization. Hospitals and health systems should establish metrics upfront that show whether changes were made and what the impact of those changes has been. Remember, the tools themselves don’t change anything. It’s their ongoing, active, and appropriate implementation and long-term, reliable use by organization leaders that moves the needle.

Are there any educational materials you can share to help healthcare providers in these efforts?

HFMA RESOURCE LIBRARY

Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.

No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.

This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.

This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.

Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.

Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.

To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.

Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.

Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.

Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.

Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.

The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.

Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.

Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.

Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.

Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.

The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.

The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.

Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.

Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.

Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.

Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.

HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.

The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.

Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.

Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?

Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.

This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.

Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.

With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.

Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.